The corporate takeover of America, disasters stemming from the deregulaion of business, repercusions from the collapse of Enron, the subprime mortgage scandal, the near collapse of the financial system, widening income inequality, the obscene inflation of CEO compensation, the end of locally owned media, market crashes reminisecnt of 1929, blackouts, drug company scandals, rampant greed and materialism., These, says William Kleinknecht, are the bitter legacy of Reaganism. Why are absolutely none of these unmistakeable harbingers of American decline laid where they belong - at the door of Ronald Reagan? Kleinknecht believes it is because the so-called liberal media (or any other media for that matter) never critizes the saintly Reagan. This disconnect between the Reagan of Myth and the Reagan of Reality has been palpable in the media for many years. The only story that is ever allowed to get out is the one put out by the ideological fanatics and free market zealots of the Reagan propaganda machine. This book is an attempt to right that wrong.
Once upon a time, in the middle decades of the last century, the United States had a government that was, more or less, "of the people, by the people and for the people," insofar as that ideal can be achieved. The combined sweep of Populism, Progressivism and the New Deal opened the way for a remarkably affluent and egalitarian society. A broad and prosperous middle class emerged because of the greatest redistribution of income downwards in our nation's history. A truly Golden Age had arrived. Unfortunately, it was not to last.
Ronald Reagan stood against everything that had been achieved in this remarkable age of reform. His constant attacks on the inefficiency of government, when he was doing everything he could to make it inefficient, became a self-fulfilling prophecy. The more money that was taken away from government programs, and he starved government as much as he could, the more ineffective they became. The more he made fun of government, the more ridiculous government bureaucrats came to be seen in the public eye. Gradually government, and the broader realm of public service has come to seem disreputable, disdained by the best and brightest college students planning their careers. Government was always the problem, never the solution.
The greatest tragedy of Ronald Reagan was his betrayal of the working people of America. The two periods of economic expansion that followed his election did little or nothing for Americans in the middle and lower income brackets., A study by the Economic Policy Institute in January, 2001 painted a picture of rising inequality. Expressed in constant 1998 dollars, households whose wealth placed them in the bottom 40 percent of the country had seen none of the benefits of two decades of economic growth. Between 1962 and 1983 the average household net worth of that group had grown from $800 to $4,700. But by the time Reagan was out of office in 1989 that group had a negative net worth of $4,100; that is they were in debt for that amount. Even during the unbridled prosperity of the 1990s that group has floundered, its household worth reaching only $1,000 in 1998. Such were the "blessings" of "trickle-down economics."
How has the middle class fared as a result of this Reagan Revolution? Between 1983 and 1989 the household net worth the the middle 20 percent grew modestly from $55,000 to $58,000 and then began declining reaching $49,100 by 1995. Only in the second half of the 1990s (when Clinton was resident) did the middle 20 percent begin to see the benefits of prosperity with its household worth climbng to $61,000 in 1998. Still, after the two longest spurts of economic growth in American history, the middle 20 percent of American households was, on average, only $5,500 richer.
And the winners of this economic growth derby? - the rich and the super rich. The top 1 percent of households saw its average net worth grow from $7.2 million to $9.1 million between 1983 and 1989 a 26.9 percent increase that far surpassed the 6 percent growth for the middle 20 percent. The next 9 percent at the top of the ladder saw its worth grow from $814,200 to $897,000, a more than ten percent increase. In the ensuing years the rich and super rich continued to pull ahead of the pack. The top 1 percent had a net worth of $10.2 million in 1998 - a 42.2 percent increase from 1983 - and the next 9 percent had an average worth of $1 million, a 24.4 percent increase from 1983. The middle 20 percent of households saw their net worth increase by only 9.9 percent in that decade and a half.
Ronald Reagan disenfranchised the average citizen by inventing the soft-money machine that made large corporations the real power in Washington. He weakened the enforcement of labor laws and inspired union busters across the country by firing more than eleven thousand air traffic controllers and breaking their union in 1981. He empowered corporate executives to abandon the concept of loyalty to employees, shareholders and communities. He presided over the slow creep of crass commercial values into virtually every sphere of American life: the non-profit sector, law, health care, politics, public schools, public radio and public television. Instead of public policy's influencing the corporation to fit the needs of society, society is shaped to fit the needs of the corporation.
Something went horribly wrong on election day in 1980, the day our country was turned over to mean-spirited religious zealots, thinly veiled racists, law and order extremists, warmongers, and a class of people shamefully willing to act as handmaidens of the wealthy at the expense of the ordinary citizen. It has proven untrue that deeply slashing income taxes promotes investment and creates an increase in tax revenues; it has proven disastrously untrue that deregulating the financial sector benefits the consumer. What you've got when you have monstrously big business and a government "small enough to be drowned in the bath tub," is a plutocracy "of the rich, by the rich and for the rich." What you've got when you have a government that does not regulate financial crooks and scoundrels is a kleptocracy of thieves.
This book chronicles America's sad decline from its Golden Age and the primary reason for that decline - Ronald Reagan